The stock market had its worst post-Christmas performance since 1937, and the biggest rally on record while kicking off the new year. "The myth is that we are now seeing the clouds part to the extent that cash will be put to work. Not so fast. It is very likely that much of the market advance has been short-covering and some abatement in selling activity."

The market can celebrate that the worst impact of the fiscal cliff has been avoided but the spending cuts are still up for debate. "So as equities now retest the cycle highs, it would be a folly to believe that we will not experience recurring setbacks and heightened volatility along the way. This makes for a terrific backdrop for nimble trading but beyond that long-only strategies would be well advised to hedge with calls on volatility given how cheap this insurance is right now."

The link between politics and economics will continue in 2013, according to PIMCO's Mohamed El-Erian.

"There are three scenarios: good economics and effective politics provide the basis for a growing and more cooperative global economy; bad economics interact with dysfunctional politics to ruin the day; or the world muddles through, increasingly unstable, as a tug of war between economics and politics plays out, with no clear result or direction.

Part of the answer depends on what happens in three countries in particular – China, Germany, and the US. Their economic and political stability is essential to the well-being of a world economy that has yet to recover fully from the 2008 global financial crisis.

Current indications, albeit incomplete, suggest that the three will continue to anchor the global economy in 2013. That is the good news. The bad news is that their anchor may remain both tentative and insufficient to restore the level of growth and financial stability to which billions of people aspire."

Legendary British investor Sir John Templeton had 16 rules of investment. As we step into 2013 here are a few to keep in mind. Invest, don't trade or speculate, buy low, buy value not market trends or the economic outlook, and aggressively monitor your investments.

Deutsche Bank's Michael Lewis and Christina McGlone expect commodities to rebound in 2013. There are however two risks to this view, the first is a significant improvement in the economy, the second is a violent turn in the U.S. dollar.

"Historically US dollar cycles persist for an average of seven years, hence the current bear cycle in the US dollar is in its 11th year, and consequently should be viewed as long in the tooth. This has important implications for commodity markets not least given the growing correlation between risk assets since the onset of the financial crisis. Turns in the US dollar following bear cycles can be violent. For example, when the dollar turned in July 1980, the dollar appreciated by just over 40% within the following 12 month period.

Given the ongoing weakness in the US basic balance we expect a turn in the dollar is some way off and that the US dollar will display weakness in the first half of this year."

Financial advisers with years of experience and strong internal support systems clearly have an edge in gaining new business, says Henry Yoshida, co-founder of the Maresh Yoshida 401k Group. Along with other retirement specialists at several other established firms, the ex-Merrill Lynch wealth adviser predicts that some of the biggest growth opportunities in 2013 are likely to be through lower-to-mid-tier plan sponsors."

JP Morgan Funds put out a great chart that shows stock market volatility and correlations among stocks since the Great Depression. The chart clearly shows that correlations among stocks increase during periods of high volatility.